02451cam a22002657 4500001000700000003000500007005001700012008004100029100001700070245008100087260006600168490004200234500001900276520127500295530006101570538007201631538003601703690007601739690008901815690008701904710004201991830007702033856003802110856003702148w13789NBER20170818014553.0170818s2008 mau||||fs|||| 000 0 eng d1 aHurst, Erik.14aThe Retirement of a Consumption Puzzleh[electronic resource] /cErik Hurst. aCambridge, Mass.bNational Bureau of Economic Researchc2008.1 aNBER working paper seriesvno. w13789 aFebruary 2008.3 aThis paper summarizes five facts that have emerged from the recent literature on consumption behavior during retirement. Collectively, the recent literature has shown that there is no puzzle with respect to the spending patterns of most households as they transition into retirement. In particular, the literature has shown that there is substantial heterogeneity in spending changes at retirement across consumption categories. The declines in spending during retirement for the average household are limited to the categories of food and work related expenses. Spending in nearly all other categories of non-durable expenditure remains constant or increases. Moreover, even though food spending declines during retirement, actual food intake remains constant. The literature also shows that there is substantial heterogeneity across households in the change in expenditure associated with retirement. Much of this heterogeneity, however, can be explained by households involuntarily retiring due to deteriorating health. Overall, the literature shows that the standard model of lifecycle consumption augmented with home production and uncertain health shocks does well in explaining the consumption patterns of most households as they transition into retirement. aHardcopy version available to institutional subscribers. aSystem requirements: Adobe [Acrobat] Reader required for PDF files. aMode of access: World Wide Web. 7aD11 - Consumer Economics: Theory2Journal of Economic Literature class. 7aE21 - Consumption • Saving • Wealth2Journal of Economic Literature class. 7aJ26 - Retirement • Retirement Policies2Journal of Economic Literature class.2 aNational Bureau of Economic Research. 0aWorking Paper Series (National Bureau of Economic Research)vno. w13789.4 uhttp://www.nber.org/papers/w1378941uhttp://dx.doi.org/10.3386/w13789